German coalition talks drag on into third extra day

Coalition talks between Germany's centre-left and conservative parties were still going on Wednesday morning, as Chancellor Angela Merkel negotiated through the night to break four months of paralysis in Berlin.

Merkel and Social Democratic Party (SPD) leader Martin Schulz sat down Tuesday morning for what was supposed to be the final day of haggling over details in a process begun in early January.

Leaders are under pressure to form a government and clear the roadblocks that have Germany lame since inconclusive elections in late September.

Schulz sat down with Merkel Tuesday morning for what was supposed to be the final day of haggling over details in a process begun in early January.

Adam BERRY, AFP

If the present talks fall through, Merkel could be forced either to govern with an unstable minority government or to return to the polls and ask voters to think again -- with the risk that more will turn to the far-right Alternative for Germany (AfD).

But the SPD is deeply divided on whether to back her for chancellor for a third time, with opponents in the party pointing to the 155-year-old movement crumbling from almost 35 percent of the vote to just 20.5 during the Merkel era.

Major sticking points are reportedly reform to Germany's two-tier health insurance system and setting limits to temporary work contracts, questions the SPD is determined to address in the coalition agreement.

If they reach agreement with conservatives, SPD leaders will have to submit their final results to a vote by more than 460,000 party members, which could be completed by early March.